GDP vs GPI

[BrntOrngStmpeDe]

Anyone have an opinion on why we continue to use GDP as the catch all economic indicator? It seems to fail to capture (and indeed gives positive weight) to so many negative events. Is there a logic to support its continued use, or a group that benefits from its continued use as the primary economic barometer?

 

[Musburger1]

Anyone have an opinion on why we continue to use GDP as the catch all economic indicator? It seems to fail to capture (and indeed gives positive weight) to so many negative events. Is there a logic to support its continued use, or a group that benefits from its continued use as the primary economic barometer?

Government generally manipulates or tweaks economic indicators to project a more positive impression of the economy rather than reality. This is evidenced by how the unemployment rate is calculated, the CPI (consumer price index), etc.

Elements within GDP which inflate perception would include debt spending, health related spending, and so forth.

For example, if a billion dollars worth of fertilizer is purchased in the Midwest, that's positive GDP. If the runoff flows down the Mississippi and creates a dead zone that impacts shrimping, that doesn't show up. Better yet, if the pollution requires $50 million in tax dollars to clean up the mess, that also results in a higher GDP. Why would the government want to change this? If you were in office would you want citizens to have access to data that says maybe the economy isn't doing so well after all?